Background on Gruma and its Relevance
Gruma, a Mexican multinational company specializing in corn flour and tortilla production, has been under scrutiny by Mexico’s antitrust authority for allegedly imposing barriers to competition. The company holds approximately 70% of the market share in the corn flour sector.
CNA’s Decision and Gruma’s Commitment
The Comisión Nacional Antimonopolios (CNA) announced that it accepted Gruma’s proposal to resolve a legal dispute regarding supposed barriers to competition. The agreement includes eliminating all exclusivity or minimum purchase obligations previously imposed on tortilla shop owners through contracts.
Additionally, Gruma will provide tortilla shops with machinery (tortilladoras and batidoras) via comodatos, leases, or financing as part of the agreement.
Duration and Implementation
For the next ten years, Gruma will submit periodic reports to the CNA. An integral evaluation of the measures’ implementation will also take place after five years.
Gruma has 90 to 180 days to establish, in collaboration with the CNA, the terms of the documentation implementing these measures.
Impact on Tortilla Shops and Market Competition
Previously, between 30% to 40% of Gruma’s clients were subject to exclusive supply contracts. With this agreement, tortilla shop owners will have greater freedom in choosing their corn flour supplier and significantly reduce associated costs.
“These measures will enable tortilla shops to freely select their corn flour supplier,” explained Andrea Marván Saltiel, CNA’s presiding commissioner.
Market Share and Price Reduction
With Gruma’s market participation at around 70%, the CNA believes opening the market to approximately 30% to 40% of its clients will substantially alter competitive conditions.
Legal Process and CNA’s Role
The legal process against Gruma began in November 2022. In October 2024, the then-Comisión Federal de Competencia Económica (Cofece) issued a Preliminary Opinion, identifying barriers to competition in the corn flour market.
The proposed corrective measure was for Gruma to divest five of its 18 corn flour mills in Mexico. Following the opinion’s release, a lawsuit ensued, which now concludes due to Gruma’s commitments.
Key Questions and Answers
- What is the main issue in this case? The main concern was Gruma’s alleged imposition of barriers to competition by forcing tortilla shops to purchase their corn flour exclusively.
- What did Gruma commit to? Gruma agreed to eliminate all exclusivity or minimum purchase obligations from contracts with tortilla shop owners and provide them with machinery through comodatos, leases, or financing.
- How long will Gruma’s commitments last? The agreement will be monitored for a period of 10 years.
- What impact will this have on tortilla shops? Tortilla shop owners will gain more freedom in selecting corn flour suppliers and reduce associated costs.
- How will this affect market competition? By opening the market to around 30% to 40% of Gruma’s former clients, competitive conditions are expected to change significantly.
